Top 10 Reasons To Lease

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New car, all the time. Leasing a car means you always get to drive around in a nice new car. For many people, this is an emotional boost that can't be ignored. If you love cars and driving, this is a big perk.

Less maintenance issues. Because you're always driving a newer car, you usually don't have to deal with the regular maintenance issues that car owners face as their vehicles age. You turn in your car before all those problems start showing up (e.g. worn rotors or slipping transmission). If you lead a very busy life, or you're on the road a lot, this is one less stress you have to deal with.

Leases are tax deductible for small businesses. If you're self-employed, commissioned sales or you own a business, you can write off your lease as a business expense. This means up to 80% depending on usage and mileage driven.

"Afford" a nicer car. If you've ever wondered how it is that so many people can afford to drive an A8 or Q7, then wonder no more. According to LeaseGuide.com, around 75% of all luxury cars are leased. The reason is because banks don't like to loan out more than $30,000 for a car loan. If you want a car that's worth more than that and you don't have the money to make up the difference, leasing is your only option. On the upside, your monthly payment will be lower than if you actually bought a car. Leasing allows you to "afford" a nicer car than you'd get if you had to buy it.

Few upfront costs. Speaking of costs, leasing allows you to get into a car with very few "upfront" costs. You often don't need a down payment (or if you do, it's fairly low), your monthly payments are lower, and your sales tax is going to be a lot lower since you only have to pay tax on the value of the car you actually used. According to Edmunds.com, this means that during the life of your lease, you're going to pay roughly half the sales tax you would if you bought the car.

Cost of Interest. The cost of interest on a lease is equal to 1% less on a finance. This because on a finance you are paying interest on the tax you paid up front for the purchase. The lease only calculates the interest on the cost of the car and tax is paid on the monthly payment.

Residual value. This is the value of the car or truck at the end of the lease. An inflated residual value lowers your monthly payments, but it can also handcuff you. A more realistic residual value will make it easier to sell the lease, trade your vehicle in the middle of the lease or buy the vehicle at the end of the lease. The more realistic the residual value the more options you have during and at the end of the lease

Buy what appreciates. Regardless of the car you choose it will lose value over its lifetime. Use your cash to pay down high interest debt, pay down your mortgage or top up your RRSP. All will save you money and in the case of your mortgage or RRSP increase your net worth. A car is a bad way to invest your money. Lease the car, pay for the usage and then decide if you want to keep it by buying it out or replacing it. Lots of options and your money is still at work for you.

Cash Flow. For the same cost of a car loan, leasing provides a lower monthly payment. With the rising cost of gas, maintenance and insurance you can have your car payment, insurance and some of you gas or maintenance for the cost of a monthly loan payment.

Flexibility. Long term loans stretch your borrowing, thus locking you in for a longer period. Leasing allows you to turn your car over in a shorter time. Or if you have a career or lifestyle change you simply pay of the difference between the lease payout and the cars value to move the car or get into a new one. A properly structured lease will give you the options you need if required.

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